Publication

North South Transitions to Green Economies

Greening the economy in the context of poverty alleviation and sustainable development rests on, among other things, the rapid and effective dissemination of climate-friendly technologies, namely renewable energies. Few developing countries already have considerable domestic production capacities for climate-friendly technologies. Therefore, the main task is to significantly scale-up production capacities for clean and energy-efficient technologies the world over.

Enhancing global technology transfer requires significant financing and smart governance. Intensive global cooperation is needed so that know-how and resources from forerunner countries and companies can be tapped and made available for building-up production capacities and demand in developing countries, and for adapting technologies to local needs and circumstances for its most effective use.

Foreign direct investments (FDI) can provide a valuable vehicle in helping to realise global technology transfer. A fundamental reform of investment support policies is needed on the side of the investing countries as well as an adequate enabling environment and investment governance polices need to be established on the side of recipient countries. In order to advance sustainable technology transfer for a greening of the economy, this paper takes a closer look at both sides.

Given that FDI so far has not always performed well as regards sustainability and fairness, past experiences with foreign direct investments are reviewed in the paper next to an investigation of a conceptual framework for sustainable climate-friendly technology transfer. Current market framework conditions as well as existing national, bilateral, and multilateral policies for the governance of international investments are reflected on to assess their adequacy for sustainable technology transfer. Chapters 5 and 6 then discuss in greater detail policies and measures in the North and South to boost sustainable technology transfer. On the side of recipient countries of foreign investments, the paper suggests various policies that could create enabling environments to attract sustainable FDI, and ensure that these investments serve both to enhance climate protection and economic diversification. Proposals are made, on how governments can build effective science and technology infrastructures that involve local governments and community institutions in public spending activities for research and development. Comprehensive technology needs-assessments are necessary to inform decision-makers about future technology options and to help select the strategies most appropriate to the country, while specific technology roadmaps can then draw future pathways in terms of specific capabilities, locations, and timelines. Moreover, policies that combine fiscal and regulatory measures by lowering costs and stimulating demand – ranging from carbon taxes through to codes, standards, and the removal of counterproductive subsidies to introducing feed-in tariffs – can steer investments in desired directions. Furthermore, governments can better engage the banking sector, for example by demanding that banks and other lending institutions finance environmentally sound technologies and projects, or by establishing public “green development banks”. Finally, bilateral or multilateral collaboration between countries and companies could be strengthened through various pilot projects by boosting the Climate Technology Initiative, or by establishing Regional Technology Synergy Centres.

If the creation of attractive enabling environments in the global South goes hand in hand with new ways of careful export support in the global North, this will work as a global and fair Green New Deal. In the end, all sides will significantly benefit: anthropogenic greenhouse gases can be reduced, while at the same time increased global cooperation will help foster sustainable development in the South and a greening of the economy in the North.